Question

The CEO of a business firm wants to increase the productivity of the employees while minimizing the labor costs incurred by the company. He decides to pay a monthly salary to full-time staff members. However, he also wants to compensate employees for exceptional work through bonuses at the end of every fiscal year. In the given scenario, the CEO can use a _____ to tie a portion of the compensation to employee effort.a. pay-for-experience standardb. competency-based pay systemc. pay-for-performance standardd. skill-based pay system

Answer 1

Answer: pay-for-performance standard

Explanation: In simple words, performance based pay refers to the payment structure under which any employee who performs extra work is paid bonus for doing so.

Suck kind of system is implemented for improving the performance of the employees and boosting their morale.

Hence, the manager can use pay for performance standard.